Fannie Mae and Freddie Mac may be dominating the residential mortgage market these days, funding close to 80 percent of all new loans. But nobody in the lending business seems to be patting them on the back for keeping the mortgage market afloat. Instead, lenders are criticizing the two government-sponsored enterprises for dramatically tightening underwriting and hiking a variety of fees in the current liquidity-starved mortgage environment.
“We are making better loans than we have in years. If so, what’s the need for higher fees [from Fannie and Freddie]? What does their charter say they [the GSEs] are here for?” asked David Kittle, the incoming chairman of the Mortgage Bankers Association of America, and president of Principle Wholesale Lending. MBA reportedly is actively engaged in discussions with both Fannie Mae and Freddie Mac regarding their tighter underwriting and higher fee structure. And there is speculation that lenders may soon see some relief.
